The court disagreed. Under its intellectual property policies and agreements with SSOs, Qualcomm was required to make licenses available “under reasonable terms and conditions that are demonstrably free of any unfair discrimination to applications desiring to utilize the license for the purpose of implementing” the standard. This is known as the FRAND standard, which stands for “fair, reasonable, and nondiscriminatory.” The court did not lend any credence to Qualcomm’s argument, which attempted to distinguish between device suppliers and modem chip suppliers. Because a modem chip is a core component of a cellular handset, a license to “supply modem chips is for the purpose of practicing or implementing cellular standards.” Therefore, Qualcomm must license to the component suppliers, not just suppliers of the complete device. The upshot, according to the Wall Street Journal: “Qualcomm historically has licensed patents by charging device makers a percentage of the sales price up to $400 on handsets. The ruling means that it could only assess fees based on the $15 to $20 cost of modem chips in the future.”

Gesmer will continue to follow updates on this case. For more information on standard-setting organizations and standard essential patents, please visit www.consortiuminfo.org.

Gesmer Updegrove was proud to recently sponsor the Center for Women & Enterprise’s 2018 Women Business Leaders Conference. Each year, this signature event hosts hundreds of entrepreneurs and business professionals for a day of compelling speakers, workshops and interactive panels led by industry experts. GU attorneys Kate Sams and Shannon Nolley attended this year’s conference, with keynote speeches by Nataly Kogan, Co-Founder & CEO of Happier, and Manisha Thakor, Founder of MoneyZen. GU client Kristin Grimm of The Evelyn Group also led a panel focused on empowering women entrepreneurs to transform their ideas into successful enterprises.

CWE is a nonprofit organization devoted to providing opportunities for women entrepreneurs and women in business to increase professional success, personal growth and financial independence through mentorship, workshops and continuing education.